Rubber producers expected to sign new price pact
Rubber producers expected to sign new price pact
SINGAPORE (AFP): Asia's key rubber producers opened annual talks here yesterday amid optimism they would sign and ratify a new global price stabilization agreement ahead of a December deadline.
Failure by producers and consumers to sign the third International Natural Rubber Agreement (INRA) hammered out in Geneva in February would liquidate the current pact expiring on Dec.28, industry officials said.
"I understand that the ANRPC member countries are seriously considering the signing and ratification of INRA 1995," said J. Lalithambika, secretary-general of the Association of Natural Rubber Producing Countries (ANRPC).
Asked how Asian producers viewed the proposed agreement, she said: "It's a political decision."
The agreement is expected to top the agenda of the two-day talks here of the ANRPC assembly, the policy-making body of the association.
ANRPC, an inter-governmental organization, comprises India, Indonesia, Malaysia, Papua New Guinea, Singapore, Sri Lanka, Thailand.
They produce about 85 percent of the world's natural rubber.
Singapore is not a rubber producer but is a major transshipment and trading center of the commodity.
Only Malaysia, Indonesia, Thailand and Sri Lanka are among the six producer-members of the International Natural Rubber Organization (INRO) which implements the INRA agreement. The 20 consumer members in INRO are led by the European Union, the United States and Japan.
The agreement sets a minimum reference price for rubber at which the INRO buffer stock manager intervenes to buy or sell rubber in the open market to help narrow price fluctuations.
Sources said that internal bickering among key producer countries over INRO administrative issues and worries that the Republican-dominated US Congress was generally not favorable towards commodity pacts were delaying the pact's endorsement.
P.O. Thomas, a consultant with the Kuala Lumpur-based INRO, warned at the sidelines of the Singapore meeting that the natural rubber industry would face "serious problems" if INRA 1995 was not signed before the deadline.
"If they don't sign now that means they are not giving the agreement a chance to survive," he told reporters.
Thomas said there was some delay encountered by governments which had to seek cabinet or parliamentary approval of the new pact, which will be for a four-year period from the current five, with two possible 12-month extensions.
Technically, he said, the current agreement would be liquidated if INRO members did not sign the new pact.
"The agreement provides for a period of three years for liquidation but it depends on the INRO council whether they want to immediately take procedures leading to the liquidation," Thomas said.
No one has signed the pact so far but officials here said Sri Lanka has given it the go-ahead.
Natural rubber prices have moderated after reaching a six-year high earlier this year on higher demand by manufacturers and poor weather in producing areas.
The INRO daily market indicator price yesterday was 289.31 Malaysia/Singapore cents, a figure based on the average rate of the two currencies and the prices of three rubber grades covering markets in Kuala Lumpur, Singapore, London and New York.